Due to my background, I’m invited to quite a few privileged conversations. One of those occurred a few months ago, when a Beijing-based money manager sent my office an email, and asked if I could meet him in Toronto for coffee. He was fairly vague, but said he just wanted to have a casual conversation about real estate in Canada. Turns out he owns Canadian property, and wanted to know if I felt he should sell. We met a few days later, and I told him what I tell everyone: If you’re buying a house to live in, it doesn’t matter. If you’re living in it, it’s a lifestyle choice. Enjoy your home, even if you only occasionally use it. If you make a profit on the sale, that’s a bonus.

Then half-jokingly, I laughed and said “if you’re a land banker, it’s a little different. There’s a lot of building in Toronto, prices climbed an unsustainable amount, and the market presents significant downside risks in my opinion.” He didn’t laugh. He looked at the quiet dude he showed up with, and nodded. Turns out he was land banking, and had 15 properties. They were already on the fence about selling, but they wanted to see what I thought. They were not tenanted, so it would be quick and easy he explained. This is urban land banking. Read More